Avoiding Surprise Bills With Homework and Negotiation

Friday

When a health care provider’s cost is higher than the insurance company’s rate, patients can receive an invoice for the difference: the dreaded “balance billing.”

Vicki Cornford of Roscoe, Ill., had long experience dealing with medical bills. But even she was thrown for a loop by “balance billing.”

First, some background. Ms. Cornford’s daughter Amber, now 21, was born with a rare bone disease that over the years has demanded constant monitoring, treatment and operations.

As a result, Ms. Cornford has dealt with all manner of billing hassles, including denied claims, administrative errors and endless paperwork.

But last fall, Amber, now a nursing student at Loyola University in Chicago and still covered under her father’s employer-sponsored health insurance plan, underwent yet another operation. A few weeks later, Ms. Cornford received a bill for about $500 from the anesthesiologist who treated her daughter.

That seemed strange. Ms. Cornford was sure she had seen a claim for the anesthesiologist on a recent explanation of benefits statement from her insurer. But this new bill, it turned out, was for the remainder of the anesthesiologist’s fee not covered by Ms. Cornford’s insurance.

“I’ve seen just about every mix-up possible over the years,” Ms. Cornford said. “But with this one I couldn’t understand why I was getting a bill.”

Ms. Cornford would soon become very familiar with the phenomenon known as balance billing. It is a controversial and sometimes illegal practice: doctors and other health care providers receive a discounted payment from the insurance company — an amount less than the fee they want to be paid — and then they bill the patient for the rest. Most states, including Illinois, have passed laws making balance billing illegal within an insurer’s medical network. And federal law prohibits balance billing by providers paid under Medicare.

But balance billing in these cases can still happen. If you receive a bill from an in-network provider that you are not expecting, call your insurer immediately. “Your insurance company is the best enforcer, if you will, of these laws,” said Jane Cooper, chief executive of Patient Care, a Milwaukee patient advocate firm.

Most cases occur when patients who are part of H.M.O.’s, P.P.O.’s and other network health care plans use an out-of-network doctor, lab hospital or other provider. H.M.O.’s, as a rule, will not cover any out-of-network fees unless for an emergency or for a pre-approved treatment so specialized that no one in the network can provide it. P.P.O.’s generally cover some percentage of out-of-network fees, usually 70 or 80 percent of so-called usual and customary charges.

When an H.M.O. or a P.P.O. does agree to pay an out-of-network surgeon, say, it is easy to be lulled into a false sense of security: Pre-approval means the entire bill will be paid, right? Maybe not.

Instead, through the dark art of balance billing, you may discover — usually only when the bill arrives — that the provider is looking to collect more than the insurance company has agreed to pay. The recent federal overhaul of health insurance laws does not directly address the balance billing issue.

“In many cases people just pay, figuring they owe the money and there’s nothing else they can do,” said Ms. Cooper. But there are ways to avoid balance billing in the first place — and to fight back if you believe this has happened to you.

STAY IN NETWORK This is really the best way you can avoid extra charges, Ms. Cooper said.

Of course, in many cases, particularly emergencies, you do not have a choice. But often patients will go to an outside doctor because of reputation or a recommendation from a family member or friend.

“There may very well be a professional who is just as qualified in your network,” Ms. Cooper said. “Then you can be sure the cost will be fully covered.”

DOUBLE-CHECK The first time you visit a doctor or other health care provider, always call and verify that he or she is indeed in your network, Ms. Cooper suggested. Web sites can be outdated and mix-ups do happen. A physical therapist with two offices for instance, may be considered part of your network in only one of those locations.

Erin Moaratty, a spokeswoman for the nonprofit Patient Advocate Foundation, notes that even if the hospital you are going to is in your network, some of the people who treat you there may not be.

That is what happened to Ms. Cornford. Her daughter’s anesthesiologist sent the extra bill because he was not under contract with Ms. Cornford’s insurer. Ultimately, a patient advocate at Ms. Cooper’s firm helped persuade the anesthesiologist to agree to accept the discounted fee from the insurer.

As best you can, you need to make sure before you are admitted to an in-network hospital that you will be treated by doctors, anesthesiologists, radiologists, physical therapists and other providers who are in your network. That way you will not get hit with any “balance” bills.

NEGOTIATE UPFRONT If you know you must go out of network, be ready to talk money before you receive treatment, said Jennifer Jaff, executive director of Advocacy for Patients With Chronic Illness.

Keep in mind that insurers pay according to what they deem are “usual and customary” fees for a particular treatment in your area. So if your P.P.O. plan pays 80 percent of out-of-network fees, this means 80 percent of “reasonable and customary” fees. If your doctor charges well above what the insurance company deems reasonable and customary, you may be balance-billed for the difference in addition to the co-payment you expected, for 20 percent of the reasonable and customary fees.

Ask the out-of-network doctor (or his or her billing specialist) what the charge for your care will be. Then check with your insurer to see how that matches up with what it will pay for out-of-network service. Armed with this information, you can then negotiate with your doctor upfront to accept the insurance company payment or ask if he or she will negotiate with the insurer directly.

And if you want to use an out-of-network hospital, you’ll need to get pre-approval from your insurance company for all of the charges involved, not just your surgeon’s fee and the hospital charges.

NEGOTIATE AFTERWARD, TOO When confronted with a balance bill, do not hesitate to call the doctor and discuss payment. Ask why he or she feels the insurance payment is not sufficient and why you were not informed of the excess fees ahead of time.

Often, a provider will compromise, Ms. Cooper said. At the very least you can work out a payment plan and keep the bill out of collections.

FILE AN APPEAL If you feel your insurance company is allocating too little toward your health care provider’s payment and you are shouldering too much of the fee, consider a more formal appeal that asks your insurance company to pay more, Ms. Moaratty suggested. This is especially true if you can justify the extra fee.

Say, for example, complications resulted from a routine procedure and the treatment or surgery took much longer than expected. Or, if what started out as a routine doctor office visit actually entailed something more complicated. More information on how to file an appeal appeared in a Feb. 6 column, “Fighting Denied Claims Requires Perseverance.”

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